Israeli private high-tech companies raised $2.5 billion in the second quarter of 2020, overcoming the coronavirus pandemic with a rise from $2.2 billion a year ago, the Israel Venture Capital Research Center and ZAG law firm said on Wednesday.
In the first half of the year, fundraising reached $5.25 billion. In all of 2019, high-tech companies raised $8.3 billion in 2019, up 30 per cent from 2018.
“Israeli growth stage companies have a strong support from the global community of investors, even though the company valuations are driven down due to the weakened economies globally,” said Marianna Shapira, IVC research director.
She noted that after a strong first year, the second half of 2020 “might yet demonstrate a notable slowdown in financial activity and capital raising efforts of Israeli high-tech companies in general, and especially in early round financing, as observed in the first quarter of 2020.”
Of the 170 deals in the second quarter, 90 were in early stage rounds.
In February – March, the number of financing deals, especially for early financing rounds (Seed and
A rounds), was down significantly. However, in April – May the number of deals for earlier rounds resumed normal ranges, and even compensated for the decline in Q1/2020.
Investor behavior was a major topic during H1. VC investors did not shy away from either first or
follow-on investments, bringing the number of VC deals to a record in Q2/2020. This is an important point given the high level of economic uncertainty, IVC notes.
“The data for H1 is solid, but in the current environment, they carry no promises for the rest of the
year. The full magnitude of the economic impact could still be felt in Q3/Q4 and prove devastating to a large number of Israeli companies,” IVC says.
Founded in 1997, IVC is a respected data source and business information company in Israel’s high-tech industry. The company provides access to news, trends and developments from venture capital and private equity funds to industry leading companies and emerging startups across Israel’s varied high tech sectors,.